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No shorts here, I just think the management should be held to account for continual poor performance.
Any idiot could see that selling AICL now wouldn’t represent value, but they had to say they were trying to pay off the 2024 bond.
Roger has come to the rescue again, but the Roger to the rescue model isn’t really sustainable
What is bad?! Another impairment to insurance, AICl sale not going through despite the boards assurance and confidence that a sale would happen, COR 136%?!? Yet more assurances that costs will be reduced…..which we’ve been told for 4 years now.
I’m still trawling through the numbers but this is worse than even I thought…..and I thought it would be bad!
£6 transformation plan is a joke! Euan should be looking for a new job
I’d say I’ve done a lot of research and a key issue with the motor book in particular has historically been relying on high retention coupled with pricing that increased rates every year. The FCA price walking rules changed that approach significantly, so the back book won’t be making anywhere near as much revenue as it did historically.
That means that new business sales and a growing book is even more important than ever…..but new business sales are down every year and the book is in decline. I don’t believe that saga have their costs in line which means again that a declining book is compounded by ongoing high costs.
Add to that the disastrous fixed price product which was launched just before the pandemic which meant that the business couldn’t adapt quickly to the changing inflationary environment. You could say that the fixed price product isn’t the new managements fault as this was launched to try and divert attention away from the previous managements poor performance but they are accountable for running the numbers and being prudent on premiums and long term inflationary risks…..that’s the whole point of top and emerging risk exercises. The management and board have been asleep at the wheel.
As the business has shifted its focus onto broking motor policies to a panel and away from AICL, the downside claims exposure is reduced but they are reliant on panel prices to UW the motor risks. For fixed price, Saga don’t get a 3 year price, they get an annual price which has rocketed…..so the margins on any fixed price policies have disappeared and will be costing revenue rather than generating any.
Once the fixed price element has been run through and off the books, you could say the tide might start turn but bear in mind that those customers will get a huge shock when they see the real price and will likely shop around and leave, which then hurts retention.
The business needs major heart surgery and I think it’s going to be painful over the next year.
My glimmer of hope was hearing how bullish Euan was on the AICL sale…..but as that hadn’t happened, I’m inclined to not believe a word he says…..and I’ll be amazed if the market does on Wednesday. All I care about is going through the insurance numbers with a fine tooth comb as that will make or break this business.
Travel was always going to do well, that’s nothing to do with the management and everything to do with a surge in demand following 2/3 years of lockdown.
Worth remembering that without Roger, this business wouldn’t exist…..Roger won’t be around forever to bail them out…..that would also be a top risk for me.
Rant over…..and whether you agree with me or not, I’m at least happy to share my rationale
I’ve shared info openly from every trading statement and piece of news for years, aspers you’re obviously a complete joker…..I wish you luck but I’m not interested in childish playground games. Hopefully no one gets sucked in by your ridiculous “I’ve done some research and the champagne is ready” statements.
Also I’ve said this previously but I don’t know who Buglet is, but I’ll concede we do seem to agree on a lot of stuff. I’d be surprised if there was no one that shared my view on at least some of the stuff that’s been going on with saga the last few years.
Bottom line, travel doing well, insurance will be shocking, AICL sale hasn’t happened so loan from Roger will be needed……more debt to pay debt after only recently restructuring and diluting to raise £150m…..does that sound like positive news?
Until I see some evidence otherwise, this is being run as a lifestyle business to enrich the few at the expense of shareholders….I don’t think the board give a monkeys about shareholder value, and why would they? What’s the incentive?
Tell a great story about turning the business around every year, play with some digital business ideas that are long term pipe dreams, restructure every year, borrow money and dilute, get paid huge salaries and bonuses regardless of results….and repeat
Also unless I’ve missed something, this year there is no investor meet session for the interims like last year…..call my cynical but maybe they don’t want to be questioned about the results?
If it is an interactive update can someone share the details as I’ve scoured and can’t find anything?
The ones at the AGM all seemed pretty pleased with themselves…..although I’d expect them to be happy after getting the bonuses they’d just received. Let’s wait and see what next week brings……there’s clearly some divided opinion on how good/bad the update will be
I’ve done a huge amount of research thanks, let’s come back to this convo in a week…..I’ve never been more
Certain that this is going to a lot worse before and if gets better.
I’m not as quick as others to heap praise on a business for doing well in travel when the demand is literally off the scale.
I wish that people who were so positive would back it up with numbers, or even at least theories as to why this will do better?
Fact is insurance is on its knees, they can’t sell the underwriting business, debt is going to increase, costs are high and there is a culture of reward for failure that starts at the top.
What exactly are the promising signs of turn around? Every time Euan opens his mouth at an update the market reacts badly
So for me, it’s not about the 150 to 130 or vice versa, it’s the decline from much higher than that.
The price had a huge shock down to 74p with insurance results and climbed back up….not in a straight line…..but to circa 180.
It climbed on the assumption that the worst of the insurance decline was stabilising and the business wheeled out the sale of AICL plans alongside some digital initiatives and the improvements in travel.
Since those heights it’s swung up and down but is now firmly on a downward trajectory again, which in my opinion demonstrates that the insurance update is going to be bad.
We already know the AICL sale won’t happen quickly enough to avoid taking on yet more debt to pay off bonds next year so yeah…..it’s going to be a shocker and I can see 74p being hit once again.
If they put some huge positive spins on it, they may reduce the drop but I have no doubt this is going to get hammered on update day, and based on the business being bullish for over a year on the AICL sale it deserves to be hammered as the management are woefully out of their depth.